Money Savings Strategies to Reduce Your Debt and Your Stress

Ever wonder how it is that you manage to spend all your money without noticing? Ever considered why you can’t save no matter how many raises you get? You can blame the economy, inflation and the cost of living, but sooner or later, you must face facts. The only thing stopping you from saving is you. Take charge of your finances with these savings strategies.

If you're already a seasoned saver, you might prefer our article on Digging Deeper for Savings. But if you are just coming to terms with your budget, you’re in the right place. Learning how to save is hard, but it will turn into the most rewarding skill of your life.  Knowing how to save will allow you to reach your life goals, lower your debt and reduce the stress in your life.
 

Make it a Priority

Making money saving a priority will make it happen for you more easily. But it will not happen just because you think about it every day. You must make a plan. So, decide what your goal is and write down a game plan. What specific goal are you saving for? If this is your first time setting a financial goal, it’s a good idea to make it reasonably small. Don’t go for a huge retirement account right off the bat. Your first goal should be to set yourself up for future success by creating an emergency fund. No more cash advances on a credit card to pay for emergencies. No more stress about how you will pay for a brake job on your car. The cash will be there when you need it.

Work out how much money you would need to live for three months. Minus the items you have been throwing money away on, like eating out and buying the next amazing gadget, figure out what you need to live. This will include housing costs, food, utilities and insurance. When you have this figure, you can work out the difference between what you need to live and what you actually make. Give yourself a small allowance for fun things and put the rest towards your emergency fund. Figure out how long that will take and set up your checking account to put the difference in your savings account automatically.

If you have trouble deciding which items are necessities, track your spending for at least one week. Save every receipt. When you see the total you are spending, it will be much easier to take out the receipts for things you do not need. Add those up. You should be putting that money away every week.
 

How much to save

Once you have taken care of your emergency expense account, you will have a stronger handle on saving. You’ll understand what you can and cannot live without. At this point, you should set a savings goal of 10% of your after tax income. Saving becomes habit-forming and you will find that the 10% that looks so small turns into a lot in just a few years. This will turn into your retirement account. Meet with a financial adviser to determine the best way of investing this money. That’s right…you the non-saver…could actually be investing towards your retirement if you just  decide  to make it happen. 

Saving coins is one way that many use to add even more to the savings account. Coin saving is perfect for the fun things you want to buy. Don’t use your 10% for fun things. That money is so you can enjoy life when you get older. But the coins add up to a few hundred dollars quickly. Now you can get that iPad you are drooling over.

And if you don’t have it, don’t spend it. It seems so simple, but the temptation to use credit cards is strong. Once you have an emergency account, you don’t even need a credit card for emergencies. There’s nothing wrong with putting the phone bill on auto-pay as long as you pay it down every month. Never keep a high balance on your credit cards.

Finally, be faithful to yourself. Get selfish. This plan is for you so that you can get what you want in life. This is about your long-term financial health, not about your cravings and yearnings. In most cases, those "fun" things are just a way for you to cope with the stress of always being short on cash. Someday you won’t be able to work. Your car will break down on you and you will need that extra money. Now that will truly be stressful. Take better care of yourself and your life by setting up and following a money strategy that works for you. You'll be happier, have more fun and experience less stress.